The California Department of Real Estate (DRE) has addressed common questions regarding who can serve as signatories on trust fund accounts managed by real estate brokers. The department clarified that, while property owners are generally not permitted to be signatories, the rules depend on specific circumstances outlined in state regulations.
According to DRE, “all funds deposited by the broker in a trust fund account shall be maintained there until disbursed by the broker in accordance with instructions from the person entitled to the funds.” For individual brokers, withdrawals from a trust account require the broker’s signature. In cases involving corporate brokers, an officer—specifically the designated officer through whom the corporation is licensed—must sign for withdrawals.
The department also noted that other individuals may be authorized as signatories if they receive written authorization from either the individual broker or designated officer. However, these arrangements do not absolve brokers of their responsibility or liability in handling trust funds.
DRE emphasized that once a real estate broker receives trust funds, they have a fiduciary duty to manage and account for those funds according to legal requirements. Brokers must maintain full control over these accounts.
The department further explained that if a broker’s duties involve activities requiring a real estate license and access to client trust funds, compliance with Business and Professions Code section 10145 and related record-keeping requirements is mandatory. Allowing both a real estate broker and property owner as co-signatories on a general account does not satisfy these legal provisions.
DRE advised brokers to proactively follow trust fund record-keeping rules and signature requirements to ensure business success and protect public interests.
